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Stem Your Expectations of Stem-Cell Discoveries

After last week's fanfare about scientists turning skin cells into cells that resemble embryonic stem cells, you'd think that scientists had invented an immortality potion or something. Alas, I'm here to tell you that we're no closer to having stem-cell therapeutics than we were before the announcement.

That's not because I don't think stem cells have promise -- I certainly do. It's just that the recent discovery has a long way to go before it can catch up to the research currently being done with stem cells.

While the creation of pluripotent cells -- those that can become any of the hundreds of human cell types -- from a source other than an embryo certainly skirts around the ethical dilemma, they're far from being ready to go into humans.

The pluripotent cells were created by using a retrovirus to inject certain genes into the cells' DNA. Unfortunately, this could cause mutations as the injected DNA gets incorporated into the cells' chromosomes. Those mutations could cause the cells to grow uncontrollably, potentially leading to the formation of a tumor. An earlier study where this technique was used with mouse cells resulted in tumors in about 20% of the mice derived from the mouse pluripotent cells. Needless to say, a treatment that will cure a spinal injury while causing the patient to develop cancer isn't going to fly with the FDA.

Scientists will need to find another way to activate the pluripotent abilities that apparently lie within cells. Until then, companies such as Geron (Nasdaq: GERN) , which is developing embryonic stem cell therapies, and StemCells (Nasdaq: STEM) or Cytori Therapeutics (Nasdaq: CYTX) , which are using other types of stem cells, will have a head start and likely will be filing marketing applications with the FDA before any therapy arises from using pluripotent-modified skin cells.

The real winnersWhile the new discovery shouldn't hurt the near-term prospects for stem-cell companies, there's potential for the method to actually help pharmaceutical companies such as Merck (NYSE: MRK) or GlaxoSmithKline (NYSE: GSK) . While the cells can't be used as therapies in humans yet, they could be used in laboratory research. A virtually endless supply of stem cells will almost certainly help advance drug discovery.

The stem-cell nirvana for scientists gets even better because they can theoretically create stem cells from any patient. That means scientists from Elan (NYSE: ELN) , for example, could take cells from a patient with Alzheimer's disease, make them pluripotent, and then differentiate them into nerve cells (something that's already been done) to try to figure out more about the disease. While most of the scientific discoveries about diseases will probably be made in basic-science laboratories at universities, pharmaceutical companies -- big and small -- will surely use the published results to develop new disease-fighting drugs.

The other major advantage for drug developers is that they can use the cells to learn about toxicity of drugs before they hit the clinic. Having an endless supply of cells that could be made into liver or heart cells -- the two most common places for toxicity -- might have saved Pfizer (NYSE: PFE) hundreds of millions of dollars in developing Bextra.

Currently, there are no good models for determining whether a drug will be toxic in humans. Companies on both sides of the Atlantic have set up consortiums to try and develop better toxicity models, and these new cells could give them a head start in developing systems for detecting toxicity of drugs before they're tested in humans.

Final Foolish thoughtsWhile the discovery is certainly newsworthy and maybe even Nobel-worthy, it's not something that should cause investors to jump on or off the stem-cell bus. Any drug discoveries -- stem cell-based or not -- from this newly discovered technique are still many years away. Even for the most long-term investor, that's a long time to wait for a payoff.

Fool contributor Brian Orelli, Ph.D., has grown mouse embryonic stem cells in the laboratory, but never the human kind. He doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

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